PHILIP Hammond has infuriated the white van man after breaking his promise to reduce a tax on the self employed. The Chancellor had promised to cut class 2 National Insurance Contributions (NICs) giving 3.4 million self employed workers an extra £130 in their pockets.

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Self-employed workers like white van men would have been £130 better off (Image: GETTY STOCK)

High taxes on the self employed discourages entrepreneurship and risk taking

John O'Connell

There are no plans to find an alternative way to deliver the tax cut and it is likely to save the Government £360 million.

John O'Connell, chief executive of the TaxPayers' Alliance said: “Millions of self-employed people in Britain who were promised lower and simpler taxes next year will be extremely disappointed by this announcement.

“High taxes on the self employed discourages entrepreneurship and risk taking. If the government wants to make contributions more equivalent between the employed and self employed, then they should instead give those on salaries a tax cut.”

There was also anger from small business representatives.

Critics said the move flies in the face of tax simplification for the self-employed (Image: GETTY)

Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “The self-employed community has been let down today, missing out on a promise to reduce their tax burden.

“This raises serious questions once again about the Government’s commitment to supporting the self-employed.

“The move is extremely disappointing and flies in the face of tax simplification.”

In a written statement to MPs, Treasury minister Robert Jenrick said: "The Government is announcing today that it will not proceed with the abolition of Class 2 National Insurance contributions (NICs) during this parliament.

"This change was originally intended to simplify the tax system for the self-employed.

Small businesses "have been let down" by the u-turn (Image: GETTY)

“We delayed the implementation of this policy in November to consider concerns relating to the impact on self-employed individuals with low profits.

“We have since engaged with interested parties to explore the issue, and further options for addressing any unintended consequences.

"A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the state pension rise substantially.

“Having listened to those likely to be affected by this change we have concluded that it would not be right to proceed during this parliament, given the negative impacts it could have on some of the lowest earning in our society."